SMEs and micro firms sinking together with south Eurozone

(L-to-R) Fernando Medina, Vice-Mayor of Lisbon, Alexandre Lourenço, the Portuguese child that won the Galileo Drawing Competition, Nuno Crato, Portuguese Minister for Education and Antonio Tajani, Vice-President of the European Commission in charge of Industry and Entrepreneurship. The Commissioner travelled to Lisbon to help Portuguese SMEs emerge from the downturn and help kick-start the Portuguese economy. He was accompanied by the representatives of about 150 European companies, who participated in more than 1800 bilateral meetings with Portuguese SMEs to form new partnerships and discuss opportunities for collaboration in key sectors of the Portuguese economy such as tourism, agriculture and the economy of the sea. The results will be felt, if at all, in the future. (EC Audiovisual Services 29/11/2013).

(L-to-R) Fernando Medina, Vice-Mayor of Lisbon, Alexandre Lourenço, the Portuguese child that won the Galileo Drawing Competition, Nuno Crato, Portuguese Minister for Education and Antonio Tajani, Vice-President of the European Commission in charge of Industry and Entrepreneurship. The Commissioner travelled to Lisbon to help Portuguese SMEs emerge from the downturn and help kick-start the Portuguese economy. He was accompanied by the representatives of about 150 European companies, who participated in more than 1800 bilateral meetings with Portuguese SMEs. The results will be felt, if at all, in the distant future. (EC Audiovisual Services 29/11/2013).

Only 0.2% of the non-financial companies are large (more than 249 employees), the rest are either micro firms (up to 10 employees, 92.5%) or small and medium enterprises (10 to 249 employees, 7.3%). Eurostat, the statistical service of the European Union, regularly publishes data on enterprises broken down by size classes, which provide information on the situation of SMEs within the EU’s non-financial business economy.

It found that nearly 40% of persons employed by non-financial enterprises in the EU28 worked for SMEs in 2011 creating an equal percentage of total turnover. The majority of EU28 enterprises were micro enterprises accounting for 30% of persons employed and 17% of turnover, while only 0.2% were large enterprises with 33% of persons employed and 44% of turnover.

Unfortunately, the business environment favours, in every respect, the large business groups and more so when it comes to finance. According to another survey conducted in the euro area by the European Central Bank (ECB) on the access to finance of small and medium-sized enterprises, the availability of bank loans deteriorated between April and September 2013 and the SMEs reported in net terms an increase in their need for bank loans.

In need of loans

In detail, the ECB stated that “Euro area SMEs reported a marginal deterioration in the availability of bank loans (-11% of respondents, in net terms, after -10% in the previous round). The survey results point to slightly increased rejection rates for euro area SMEs when applying for a loan (12%, up from 11%). The percentage of SMEs reporting access to finance as their main problem remains broadly stable (at 16%)”.

It’s not only that though; the ECB survey results also suggest that financing conditions for SMEs continue to differ significantly across euro area countries and are in general more difficult than those of larger companies. Rejections of loan demands are the name of the game in the worst hit countries. In Greece, Italy and Spain very few SMEs and micro firms dare to go to a bank asking for a loan, and of those that do dare, only a small percentage receive a positive answer.

No future without strong SMEs

ECB found that “in the period from April to September 2013, the net percentage of euro area SMEs reporting a reduction in turnover declined (-3%, compared with -11% in the previous survey period). SMEs in Germany contributed positively to turnover developments, as in previous survey periods, while SMEs in Italy and Spain contributed negatively… A high net percentage of euro area SMEs continued to report increases in labour and other costs (43% and 60% respectively, down from 47% and 69% in the previous survey period). In line with turnover and cost developments, euro area SMEs reported a continued decline in profits in the period from April to September 2013 (-25%, after -33% in the previous survey period) to which SMEs in Italy and Spain contributed strongly”.

As it becomes obvious, SMEs and micro firms in euro area crisis countries are doubly hit. Once by the fall of internal demand, and secondly by the fragmentation of the financial markets, depriving them from bank loans. This is an arrangement that cannot be tolerated any more. The future of those countries depends on the 99.8% of their companies and Germany cannot continue pretending that it’s ‘business as usual’…

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

How COVID-19 is throttling vital migration flows

An introduction to ‘Eco-Medical Literacy’ and its importance in shaping expert medical professionals

Brunei’s new penal code would enshrine ‘cruel and inhuman punishments’ UN rights chief warns

Project Manager – 2024

10 million Yemenis ‘one step away from famine’, UN food relief agency calls for ‘unhindered access’ to frontline regions

Abandoned mines could become the farms of the future

Alice in Colombia

Why Nordic nations are the best places to have children

State aid: the Commission launches an in-depth investigation into the regulation mechanism for natural gas storage in France

How the Female Medical Students in Gen Z are Changing the Patriarchy

Innovations for Content Professionals at the DCX exhibition 2018 in Berlin, in association with The European Sting

As Alan Turing makes the £50 note, how do countries design their currencies?

This Pacific island has banned fishing to allow the marine ecosystem to recover

Freshwater is saltier – and it’s bad for the planet and our health

Nicaragua: MEPs demand an end to repression of political opponents

Facebook and Google to treat Europe as the 51st State of the USA

Coronavirus could trigger a hunger pandemic – unless urgent action is taken

How we can work together in the fight against NCDs

European Parliament to scrutinise deal on future EU-UK relations

Further reforms needed for a stronger and more integrated Europe

This start-up is 3D-printing an entire neighbourhood in Mexico

Mergers: Commission approves Assa Abloy’s acquisition of Agta Record, subject to conditions

‘Forgotten’ pneumonia epidemic kills more children than any other disease

INTERVIEW: ‘Defend the people, not the States’, says outgoing UN human rights chief

The built environment has a huge role to play in improving health and wellbeing

Here’s how a revamped wealth tax could fuel the COVID recovery

Commission sets moderate greenhouse gas reduction targets for 2030

Peace in the Gulf ‘at a critical juncture’ says DiCarlo, urging continuation of Iran nuclear deal

Our healthcare systems are ailing. Here’s how to make them better

Mental health and suicide prevention – what can be done to increase access to mental health services in Morocco

How debt for climate swaps could spur a green recovery

Ebola in DR Congo: conflict zones could constitute ‘hiding places’ for the deadly virus – WHO chief

Business models inspired by nature are the future

The EU lets the bankers go on rigging the benchmarks

FROM THE FIELD: ‘Harvested’ rainwater saves Tanzanian students from stomach ulcers, typhoid

Tokyo Olympics postponed to 2021 over coronavirus concerns

Trump fines China with $50 billion a year plus some more…

‘Ghost fishing’ is threatening our oceans. Here’s how we can tackle it

Towards a tobacco free India

This is how we make basic income a reality

Technophobe or technophile? We need more conversation about digital transformation

How tech is helping the agriculture sector curb carbon emissions

How to keep essential value chains moving during the COVID-19 crisis

Three countries losing ground and one new prime minister

Coronavirus: Commission stands ready to continue supporting EU’s agri-food sector

Our health systems are under pressure. Here are 9 ways to remedy that

A European student just sets the question of the day: What kind of education policies are missing in Europe?

State aid: Commission approves €106.7 million restructuring aid and €30.2 compensation for damages suffered due to coronavirus outbreak in favour of French airline Corsair

This is where people work the longest – and shortest – hours

These are the world’s best countries to retire in, as of 2019

Disease slashing global meat output, cereals boom, bananas under watch: FAO

Italian voters put again the European Peoples in the Brussels picture

EU budget: Commission proposes major funding increase for stronger borders and migration

Closing the gaps in accelerating women’s right: the role of medical students

On Human Rights Day European Youth Forum calls for end to discrimination of young people

EU steps up economic partnership with Kenya to boost job creation

How to make your business thrive by doing good

Decades of progress ‘can be wiped out overnight,’ UN chief laments at climate session in Yokohama

Italy’s M.Renzi and Germany’s S. Gabriel veto austerity, ask EU leaders to endorse growth measures

Europe bewildered by radicalisation and terrorism

More Stings?

Advertising

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s